Title
An ordinance by the City of Colorado Springs, Colorado authorizing the issuance and delivery of its multifamily housing revenue bonds (Royal Pine Apartments Project), Series 2025 A, in one or more tax-exempt or taxable series in an aggregate amount not to exceed $60,000,000, for the purpose of financing the acquisition, construction, improvement and equipping of a multifamily housing facility in the City of Colorado Springs, State of Colorado and to pay certain issuance expenses of such bonds; approving and authorizing execution of an indenture of trust, a loan agreement with the borrower, a bond placement agreement, and a tax regulatory agreement with respect to the bonds; making findings and determinations with respect to the project and the bonds; authorizing the execution and delivery of related documents; and repealing all action heretofore taken in conflict herewith
Presenter:
Katie Sunderlin, Housing Solutions Manager
Aimee Cox, Chief Housing and Homelessness Response Officer
Body
Summary:
The ordinance will authorize the issuance and delivery of $40,000,000 in Private Activity Bonds (PAB) and up to $20,000,000 in taxable bonds for Royal Pine and the new construction of 232 total units of affordable housing located at 4150 Royal Pine Drive, Colorado Springs, CO 80920.
Previous Council Action:
Previous Council Action:
106-22, 115-23, 101-24: Resolutions adopted to carry forward the City’s annual private activity bond allocations for the financing of affordable multi-family rental projects.
87-23: Resolution declaring the intent of the City to issue its multifamily housing revenue bonds to finance an affordable multifamily housing facility known as Royal Pine Apartments
Background:
In 2018, 2019, 2020, 2021, 2022, 2023 and 2024 City Council voted to carry forward its PAB allocations for the purpose of financing qualified residential rental projects, an eligible use of PAB under the IRS code. Carrying forward PAB for multi-family affordable housing is a means for City Council to address the need for additional housing for lower-income populations in the community. The City is a conduit issuer of PAB. As a result, the City assumes no liability for repayment of the bonds. The developer accessing PAB financing agrees to carry all costs related to the bond issuance, marketing and servicing, including attorney’s fees, document preparation, and public notifications.
PAB is one of many financing tools available to private developers. As a result, PAB use is sensitive to local market conditions such as the cost of conventional financing, the experience level and willingness of the developer to use PAB, ease of access to PAB funds and the overall volume cap of the issuer.
This item supports the City’s 2024-2028 strategic plan goal of implementing policies, fostering community partnerships, and securing sustainable funding to increase housing choices so that residents have options that are right for them. Furthermore, this item is supported by and implements PlanCOS Vibrant Neighborhoods Policy VN-2.A-3 pertaining to attainable housing and providing variety of housing types for various life stages and income levels.
Financial Implications:
The Royal Pine project will utilize up to $40,000,000 of PAB volume cap. The utilization of this cap will generate up to $160,000 in issuance fees that will be used to rebate eligible development expenses for affordable and attainable housing construction through the Department’s Fee Rebate Program and pay for a portion of one staff position.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
Not passing the ordinance would delay construction of the project and fail to address a shortage of affordable rentals for low- to moderate-income households in the community.
Recommended Action
Proposed Motion:
Approve the ordinance authorizing the issuance and delivery of the City’s multi-family housing revenue bonds for Royal Pine in one or more tax-exempt or taxable series, in an aggregate principal amount not to exceed $60,000,000.